Hexagon Composites (Buy, TP: NOK27.00) - Impact from light-duty pit stop
We expect a soft Q3, reflecting slowing Mobile Pipeline sales, seasonality in Low Pressure and negative Light-Duty Vehicles & Hydrogen EBITDA, but a positive contribution from the Agility JV (Q3 results due before the market opens on 31 October). We forecast solid orders in Mobile Pipelines and an uptick in Low Pressure in H1 2019, and view the pressure in Light-Duty Vehicles & Hydrogen as temporary. We reiterate our BUY with a NOK27 target price. We would see any weakness after the results as a particularly attractive buying opportunity.Hexagon Composites is divided into three business segments. Co.'s Hexagon Ragasco segment manufactures low-pressue composite cylinders, such as cylinders for propane gas; and Co.'s Hexagon Lincoln/Hexagon Raufoss segment develops and supplies complete storage and transport systems for natural gas and hydrogen to the bus and automotive industry and for bulk transport of compressed gas. The Group's activities are divided into the following regions: Europe, North America, South-East Asia, Middle East and South America.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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